Billabong posts loss

Australian surfwear manufacturer Billabong International Ltd. posted a staggering loss on Monday of $772 million for the 12 months ended in June – the worst ever for the 40-year-old company.

The loss is more than triple Billabong's stock market value, and triple what it lost in the previous year. Sales fell 14 percent. The combination sent Billabong's stock price sliding as much as 15 percent on the Australian Securities Exchange; it closed Tuesday at 53.5 cents per share, down 5 percent from the day before.

The company also wrote down the value of its core Billabong label, along with another four of its 13 brands – Element Skateboards, Palmers Surf, Beach Culture and New Zealand surf retailer Amazon – to zero, essentially declaring them worthless.

Billabong, whose U.S. headquarters is in Irvine, has closed 158 stores over the past year, cut supplier relationships by more than 75 percent, and is in the midst of reducing European headcount by approximately 15 percent. Its market value has plunged from $3.7 billion in 2007 to $256 million today.

In July, after months of negotiation, the company struck a $359 million refinancing deal with private-equity group Altamont Capital Partners. One of the conditions was that former Oakley boss Scott Olivet replace Billabong CEO Laura Inman. The transition to new ownership has been delayed while the company considers a rival bid by private equity firms Centerbridge Partners LP and Oaktree Capital Management, which claim to offer more favorable terms.

“Liquidity has been secured and we are within weeks of finalizing our long-term funding arrangements,” Billabong Chairman Ian Pollard said in a statement.

“The company looks forward to refocusing, reinvigorating its brands and rebuilding the business on a solid, long term financial footing.”

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